The Future of Broadband: Where Are We Headed and How Will We Get There?

by Terry Costlow

Despite the lingering slump in the telecommunications industry these days, there has been plenty of activity nonetheless, as government agencies continue to help chart the future of America's Internet infrastructure. As the move to broadband continues, investors and corporations are watching closely to see how government actions will open up or limit competition.

A few bills currently moving through Congress are addressing the conflicting issues of opening up the marketplace and protecting consumer rights. At the same time, the Federal Communications Commission (FCC) has a mandate to address these areas and is moving actively on broadband issues. This more proactive characteristic is a somewhat dramatic change for the FCC, which has been criticized in the past for taking little initiative on issues.

At issue is the level of competition for cable, digital subscriber line (DSL), satellite, wireless and other emerging technologies that will bring broadband to many more users — particularly those outside of major cities. Many observers feel it's critical for the rulings that will determine the competitive landscape to emerge quickly.

The United States Needs to Take Action Now

"The United States is at a disadvantage," said Grant Seiffert, vice president of external affairs and global policy at the Telecommunications Industry Association (TIA). "Other nations are aggressively rolling out plans and building infrastructure. If we don't do the next build out to broadband, we'll see the next implementations in telecommunications, telemedicine and other areas happen elsewhere."

Congress Not Likely to Act Quickly

Most believe, however, that swift action is unlikely in Congress, since legislators' current focus is on homeland defense and corporate malfeasance. Add to that campaigns for the November elections and then, even further out, the customary adjustment time necessary when newcomers take office, and significant related action could be delayed until 2004. That lag time puts the responsibility for change squarely on the FCC.

On the upside, many observers feel current FCC chair Michael Powell is responding well to that obligation. "We are quite pleased to see Chairman Powell make aggressive statements saying he wants to resolve some of these issues by the end of the year," Seiffert said.

Some observers believe the FCC would be moving even faster if President Bush would provide some direction. "The fact that the President has exercised absolutely zero direction muddies the water for the FFC," commented Adam Thierer, director of telecommunications studies at the Cato Institute, a Washington, D.C., policy research foundation. "They (the FCC) are wondering if they'll get support for their decisions."

The FCC's In the Familiar Hot Seat

While the interest level in seeing the FCC make a decision is high, most people are quite certain that any action the agency takes will be challenged. That precedent has already been set, in fact. Shortly after the agency defined that cable modem Internet access was an information service and therefore did not need to provide open, non-discriminatory access to the public, Media Access Project (MAP) challenged the ruling.

"We're suing the FFC, challenging that definition as being contrary to the Telecommunications Act of 1996," said Harold Feld, MAP's associate director. "Cable folks can keep their pipes closed. We're suing to open them up."

The Washington, D.C.-based non-profit public law firm has also filed comments on the DSL proceeding, urging the FCC not to define DSL as an information technology. MAP contends that doing so would greatly favor the "Baby Bells" and severely limit competition.

Similarities to the AT&T Breakup

Between court challenges and the slow pace of Congress — where personality differences will likely keep progress of Internet-related bills just inching along unless significant leadership changes are made after the November elections — definitive rulings won't come swiftly. Observers note that while changes will occur, this situation resembles what happened with the telephone industry a few decades back. At that time, people said that new regulations would alter that segment of communications. Ultimately, one judge's action changed things by breaking up the AT&T monopoly — an action that set the direction for several years.

"The thing about telecommunications change in America is that it often happens in incredibly small increments," Thierer commented. "A small change here, a court ruling there. But small things make a big difference, as they have a cumulative effect over several years."

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Terry Costlow has written about the electronics industry for more than 20 years, covering a wide range of technologies and topics.